TaxTMI 
TaxTMI 
2020 (5) TMI 181
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....assessee has though filed the written submission vide letter dated 12-12-2019. Accordingly, in the facts and circumstances of the case, we propose to hear and dispose off this appeal of the assessee ex-parte by considering the written submission filed by the ld.AR of the assessee. The assessee has raised the following grounds:- ''1. For that the ld. CIT(A) have grossly erred under the facts and circumstances of the case in upholding the issuance of notice u/s 148 merely on the basis of doubt and suspicion and without having reason to believe. 2. For that the ld. CIT(A) have grossly erred under the facts and circumstances of the case in upholding the application of provisions of section 145(3) and rejection of books of a....
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....g the due process of law. The ld. DR relied on the order of the Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd. vs ITO, 236 ITR 34 and submitted that sufficiency or correctness of the material is not a thing to be considered at this stage of reopening. Thus the ld. DR relied on the order of the ld. CIT(A) qua this issue. 3.4 We have considered the rival submissions as well as the relevant materials available on record. In the case of the assessee, there was no original assessment u/s 143(3) of the Act but the return filed by the assessee was processed u/s 143(1) of the Act. Subsequently, the AO received information as well as statement recorded by the Investigation Wing, Mumbai during search and seizure operation in c....
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.... the decision of Hon'ble Apex Court in the case of 'Raymond Woollen Mills Ltd. Vs ITO [1999] 236 ITR 34 (SC), wherein it was held by their lordship that: "In this case, we do not have to give final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also pro....
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....inciple Director of Income Tax (Investigation) that assessee had received bogus loss from, his broker by client code modification, reassessment on basis of said information was justified" (vi) In the case of ACIT Vs Rajesh Jhaveri Stock Brokers (P.) Ltd [2007] 161 Taxman 316 (SC) /291 ITR 500 (SC)/ [2007] 210 CTR 30 (SC),it was held by the Hon'ble Apex Court that: "So long as the conditions of section 147 are fulfilled, the Assessing Officer is free to initiate proceedings under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings, even when intimation under section 143(1) has been issued ADAM EXPORTS v. DCI-111999] 240 ITR 224 (....
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.... of sales and purchases but not made an allegation of particular transaction with the assessee. Therefore, the assessee has contended that the basis of rejection of books of account is only a presumption and surmises and not any actual defect in the books of account. 4.3 On the other hand, the ld. DR has relied on the orders of the lower authorities and submitted that once the purchases are found to be bogus then the books of account of the assessee cannot be accepted as giving true state of affairs of the assessee and accordingly the AO has rightly rejected the books of account of the assessee. 4.4 We have considered the rival submissions as well as the relevant materials available on record. At the outset, we note that though the AO....
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.... the past history becomes the relevant basis but if the AO wishes to tinker with the basis of past records, then some flaw has to be found by the AO in making some addition and, in toe instant case under consideration, the purchases to the tune of Rs. 8563,745/- was found to be bogus/unverifiable, which is about 1.92% of the total purchases of Rs. 4,48,73,893/- declared by the appellant. As purchases to the extent of 1.92% were not verifiable during the assessment proceedings and bills were obtained through accommodation entry providers which definitely results in higher GP rate. The higher gross profit will also take into account of the irregularities committed by the appellant in obtaining accommodation entries. The gross profit of 8.40% ....